- Gold markets have had a pretty wild month of February, as we initially shot straight up in the area again but then turned around to show signs of hesitation.
- This does make a certain amount of sense considering that the market is currently worried about a plethora of different things at the same time, so it’ll be interesting to see how this plays out.
- However, using a bit of technical analysis, we can start to get an idea as to how things may play out.
If we pull back from here, I do think that there are plenty of buyers underneath willing to get involved in the gold market, due to the fact that we have to worry about tariffs still, and of course we have to worry about a lot of geopolitical issues as well, and it is going to be a situation where traders are looking at the dip in this market as a potential buying opportunity, as we are most certainly in a bullish trend.
The bullish trend has been ensconced in this market for some time and it is difficult to imagine that it would suddenly turn around. Quite frankly, we need to see a complete change in the overall attitude of markets to make gold suddenly unappealing.
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I believe given enough time we will reach the $3000 level, and it wouldn’t surprise me to reach that during the month of March. However, I do believe that it’s going to be a difficult rally from here, and we will probably see the market drop a bit from current levels.
However, the $2800 level should be an area of importance, not only from the perspective of a large, round, psychologically significant figure, but also a perspective of previous resistance. Ultimately, I think this is a scenario where we will see more of a “buy on the dip” attitude going forward, and we should be looking for buying opportunities in time the market drops. It is not until we break down below the $2650 level that I would be concerned about the overall trend.
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